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Aussies embracing Berlin as hot startup hub

Berlin is the perfect spot to set up a start-up Photo: Penny Bradfield

German isn't the easiest language in the world to learn. But when you're at high level meetings with the investors who are funding your start-up, you pick up the vocabulary pretty quickly. That's what former Brisbane writer Joel Dullroy is facing in his new life in Berlin as a start-up founder.

Dullroy is co-founder of Deskwanted.com, a site that connects co-working spaces with those looking for a work space. He is part of a growing Australian contingent of entrepreneurs who have embraced the start-up community in Berlin.

"This city has always had a good flow of highly creative Australians," says Dullroy, 30. "Many artists and bands have spent time here. Us entrepreneurial Australians are a relatively new cohort, but we are quickly making our mark. Australian accents are becoming more common at start-up events."

An accidental entrepreneur

Dullroy's journey into the world of start-ups was not planned. He left his hometown of Brisbane at 24, after working as a newspaper journalist. He then spent two years living in Estonia, before moving to Berlin in 2008. "I was instantly drawn to the creativity and energy of the city. It is a magnet for dreamers, drifters, idealists, escapists, creators and opportunists. The rent was cheap and the people inspiring, so I decided to stay."

While Dullroy hoped to work as a freelance journalist, the jobs did not come rushing in. "I struck out as a freelance journalist, working from my drafty apartment looking out onto the depths of a Berlin winter," he says. "I quickly found the experience cold, isolating and depressing. I needed to be around other people to bounce ideas off, find out about events and make new connections.

"At the same time, a colleague suggested we work together on a web-based business project, and we began looking for somewhere to sit side-by-side. And we discovered it was really hard to find a shared workspace. There was no easy portal to find and book a desk. That’s when we came up with the idea for Deskwanted, in response to our own practical problems of isolation and detachment."

Cheap rent and vibrant start-up scene

"... entrepreneurial Australians are a relatively new cohort, but we are quickly making our mark. Australian accents are becoming more common at startup events." (James Dullroy)

Dullroy says Berlin's cheap rent, low cost of living and vibrant start-up economy are key attractions. "I rent a room in a shared flat in a great neighbourhood for $380 a month. I paid a similar amount per fortnight in Brisbane and that was before property prices went mad," he says. "The cheap rent here really contributed to the development of Deskwanted. We spent almost two years working on our idea without any income. That would be impossible in most cities where the cost of living and pace of life requires you to be in full time work.

"Berlin gives you the chance to fail and time to succeed. The pace of life is slower, the cost of living is a relief. There is also a strong ecosystem of start-ups and entrepreneurs. Each evening you can attend one of a dozen meetups where you’ll find likeminded people discussing their ideas. There’s a real do-it-yourself attitude."

Dullroy and his business partner, Carsten Foertsch, a German social scientist, initially spent about $25,000 to create the trial version of their solftware. Together they invested about $12,500 and the other $12,500 came from family and friends. This amount saw them through from their launch in November 2010 up until September 2011, when they received funding from Immobilienscout24, a large real estate portal. While Dullroy is unable to disclose the amount of the investment, it is believed to be up to€500,000 (approximately, $624,000).

A chance to scale

The investment has proved beneficial for the business, not only in terms of a cash injection but also because of what Dullroy and his team have learnt from their new colleagues.

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"Immobilienscout24 took us into an incubation program, funded our growth, and taught us their secrets about search engine optimisation, online marketing and business development," he says. "They are still our main investor, and have an option to acquire us entirely in the future if the co-working market proves as fruitful as we believe it to be."

As a result, the business has grown from 1000 users in 2011, to a whopping 1.1 million users today.

Move from Melbourne

Dullroy isn't the only Aussie founding a start-up in Berlin. Former Melbournian Danielle Reid moved to the city four years ago. At the time, she had no idea she would found a start-up. Reid, 27, had moved from Australia to Guernsey in the Channel Islands, UK to work as an art director. She was on a sabbatical from that job when she headed to Berlin. "I started learning German and gave myself a four week deadline to find a job – and more than four years later, here I am," she says. "I never intended to live in Berlin. Once you experience the passion, creativity and inspiration that you find here, you won't want to leave."

Reid rented a desk at a co-working space in Berlin while she was between contracts as an art director in advertising agencies. It was here she met Norwegian Espen Systad. Together, they co-founded capsule.fm in August 2012, a service that plays live, personalised online content from your social media accounts, emails and even relevant weather or news updates.

They have since been accepted into an accelerator program. "Thanks to the accelerator programs that we have been part of [Startupbootcamp and hub:raum] we have been introduced to fantastic mentors and entrepreneurs who have provided their continual support," says Reid. "People enjoy helping and offering their advice; there is a real sense of unity within the start-up scene."

Seduced by the scene

Justin McMurray moved to Berlin in 2011 specifically because of the start-up scene. "I moved to Berlin primarily because the start-up scene here was really taking off. It's still cheap, centrally located in Europe which means talented young people pour in from the rest of Europe and Scandinavia," says McMurray. "Most crucially it has this inimitable spirit of creative possibility."

McMurray had been working in London after moving there from Sydney. "I could have stayed in London but it simply doesn't compare to the energy and enthusiasm of Berlin. I briefly considered returning to Sydney, but it doesn't have the same developed ecosystem of entrepreneurial activity and global aspiration. It's a shame because Sydney is a wonderful city and obviously I miss the beach. It's not about the tyranny of distance. It's about an appetite for changing the world and taking huge risks to try stuff that will most likely fail."

After McMurray moved to Berlin he founded somewhereHQ.com. "We connect inspired people with inspiring companies," he says. "It's like an anti-job platform focused not on skills or experience but on people's passions, interests, values and more. We're like the AirBnB for recruitment."

He started working on the idea in mid 2011. The company was formally founded in July 2012. "We funded ourselves for around 12 months," says McMurray. "We then raised a modest seed round of investment to build up our team and further validate our approach. This amount is undisclosed but we can reveal it was around the $250,000 level."

They currently have six employees, and McMurray hopes this will grow to 10 within the next six months. It's an international bunch with an Australian, Englishman, Irishman, Brazilian/German, Swiss/German and a Swede.

An environment for growth

"The start-up ecosystem is unbelievably vibrant, supportive and accessible. There are globally successful tech companies like SoundCloud and Wooga here alongside up and coming start-ups like EyeEm, Moped, Gidsy, Ezeep and Readmill. And they're generous in their help and support and feedback. I've found the people, the friends, the investment and the support I needed to build Somewhere into something that's showing huge promise, even if it is still early days."

Despite McMurray's love for Berlin, he makes a point to leave the city regularly. "Berlin is sometimes perceived as such a hip place that people sometimes assume you're not setting out to take on the world and solve a problem that truly matters," says McMurray. "That's why we try to get out and about a lot. Berlin's wonderful but it can sometimes be a bubble. I'll be in San Francisco next week and we've visited a bunch of cities to build our community in London, Amsterdam, Copenhagen, Sofia, Zurich and even Jordan."

Meanwhile, Dullroy believes the Australian diaspora has a lot to contribute to the city. "Australians have a lot to gain from being in Berlin. It gives us space and opportunity to try out our ideas. But Berlin has a lot to gain from Australians, too. We bring the proactive drive to get things done and Berlin needs more of this. Life can be too easy here sometimes, and the arrival of even just a couple of driven individuals can make a big difference."

Follow Valerie Khoo on Twitter @valeriekhoo

12 comments so far

Australians have a lot to benefit from being in Berlin but do the Berliners have anything to benefit from the Australians up there? I really doubt it. If one believes or trusts an Australian business person then they deserve all they'll get...shonky.

Commenter

Das Aussie

Location

Sydney

Date and time

March 21, 2013, 2:28PM

And when the EU collapses... Judging from the signs it isn't going to be too far away. I wouldn't want to be starting my business there. Chile would be a better option.

Commenter

James

Location

Dystopia

Date and time

March 21, 2013, 7:52PM

Why not come to Ireland to set-up a business. There is hundreds of millions of euro of funding options available here for HPSUs, favourable tax rates for business owners/entrepreneurs on an individual level, a 12.5% corporate tax rate, a thriving tech and bio med sector, and Guinness! Oh, and English is the first language and the legal system if pretty similar to Australia/UK law.

Commenter

Vern Power

Location

Dublin

Date and time

March 21, 2013, 10:19PM

@ Vern Power | Dublin

Good call. I am currently investigating this very option...for all the reasons you give.

Commenter

born2vespa

Location

auronzo di cadore, Italy

Date and time

March 22, 2013, 8:04AM

Hard Facts: Startup Genome ranking for the world’s top 25 startup ecosystems, ordered by their average throughput: 1. Silicon Valley 2. New York City 3. London .....17. Berlin. Just above Sydney at 21. Plus since when was $340 a week for a room in a shared house "cheap rent"?

Commenter

David

Location

Sydney

Date and time

March 22, 2013, 1:11AM

OK, my mistake - I see it is $380 a month....Doesn't detract from my point that Berlin is not much more vibrant than Sydney as a start-up ecosystem.

Commenter

David

Location

Sydney

Date and time

March 22, 2013, 9:08AM

A handful of Aussie drifters and opportunists does not make for an Aussie startup invasion of Berlin. I spend a lot of time here in Berlin and I've never come across another Aussie doing anything constructive other than washing dishes and talking way to much.

Commenter

W

Location

Berlin

Date and time

March 22, 2013, 1:17AM

Well I have been here for 2 years now trying to buy a property to develop a cafe to set up a business to buy. No one will help me the real estate agents here are very lazy they make a enough money to not work hard 15-20 hours per week is hard work for them and this is coming from an agent here who advises me against any investments 90% fail rate he said he had seen so many foreigners(Australians) leave broke. Have Family in other parts of Germany who warned me of this. Real Estate and Business Brokers in Frankfurt told me Berlin is in so much Debt its dragging the rest of the states down. I am now all packed and heading back to Melbourne. They said said I'm better off investing in Spain,Italy or Greece that's what the Germans are doing.

Commenter

spencer

Location

Berlin Germany

Date and time

March 22, 2013, 6:55AM

That's right. After slaving away to meet the prohibitive costs of real estate and other basics, Australians have no time or money left over to put into real innovation. More youngsters are leaving every day.

Soon Australia will go the way of the UK.

Commenter

Li

Date and time

March 22, 2013, 7:46AM

Every time an Australian does something it is reported here as though they are taking over the world! Berliners and Germans in particular have shown amazing innovation in the face of severity on a number of occasions. And especially over the last 10 years. Please balance your commentary in future. The few Australians mentioned are not the only ethnic group in this hub. What should come out of this article is the suffocating environment in Australia for innovative individuals.

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